Moody's cuts Owens & Minor view to stable

Moody's Investors Service said it affirmed the Ba2 corporate family rating and Ba2 senior unsecured debt rating of Owens & Minor following the announcement that the company plans to acquire the acute-care medical and surgical business of McKesson Corp. for about $170 million.

Although the company will add about $100 million of additional debt and deplete current cash balances, Moody's said the rapid repayment of debt and potential benefits including synergies should offset these concerns over the intermediate term.

However, because the company may face working capital challenges during the transition period, which will likely require the use of additional borrowings, the outlook has been revised to stable from positive.

Owen's & Minor's Ba2 ratings reflect its relatively small size, but this transaction will raise revenues by about 20% and should enable the company to improve its position as a leading player in the medical and surgical distribution market, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.